I'm one of those whose Apple Pay went through then got the 'Problem with your payment' email.I see no difference either, that's kinda my point. So no limit for the Watch should mean no limit for the iPhone.
Weren't there folks who had issues paying with Apple Pay for their Pro Max pre-orders, and their banks told them it was because of the value of the transaction being >£1k? Maybe that's only for 'card'holder not present transactions though? I'm genuinely interested to find out for certain what the limits are!
My bank told me it's because I had registered a phone number to Apple Pay on set up but that they didn't have a phone number for me on the system (not sure why). Apparently the mismatch caused the block.